Grexit: Greece declines to pay IMF loan installment

Athens: Greece will not repay the loan installment due to the International Monetary Fund (IMF) on Tuesday, Greek Finance Minister Yanis Varoufakis said even as the country mulled taking legal actions to block its exit from the eurozone.

However, Varoufakis expressed hope that a debt deal can be reached with international creditors, Xinhua news agency reported.

The Greek minister made the statement outside the finance ministry in Athens when asked by media about the issue with the critical deadline expiring on Tuesday afternoon.

He categorically said “No.” His comments came ahead of the July 5 referendum called by Prime Minister Alexis Tsipras.

Greece’s failure to meet its financial obligations to the IMF for a second time in a month and pay off 1.5 billion euros ($1.7) in loan installment could launch formal procedures for default in coming weeks.

Varoufakis made remarks amid media reports that in the past few hours Greece’s dialogue with international creditors has resumed to achieve a last-minute debt deal and avert a financial collapse and possible exit from eurozone.

According to an earlier report, Athens is said to have received a message from European Commission President Jean-Claude Juncker on Monday night to accept the creditors’ draft.

The Leftist Greece government is believed to have rejected once again the lenders’ draft as a basis for further discussion, but was preparing a new agreement proposal to submit to the other side before calling for a Eurogroup meeting as early as Tuesday evening, television channel Mega reported, citing sources.

According to other media reports, Prime Minister Alexis Tsipras was under pressure by a group of his close aides, ruling party radical left SYRIZA lawmakers and ministers, including Deputy Prime Minister Yannis Dragassakis, into seizing the opportunity for last-minute negotiations.

According to the reports, the government’s General Secretary Spyros Sagias has threatened to reign, while the country’s economy minister has expressed strong doubts over the referendum idea that triggered a series of developments over the past weekend after Tsipras’s announcement on Saturday.

With banks closed and capital controls imposed since Monday, the clock was ticking against Greece and the eurozone.

Scenarios circulated in Athens suggested that Greece was already on way to the return to its own currency drachma. Haris Theocharis, a former general secretary at the ministry of finance and current member of parliament with the centrist River (Potami) party, claimed that the government was making preparations for the transition.

The prime minister’s office dismissed the suggestion as an “irresponsible science fiction scenario”.

Varoufakis told Britain’s Dily Telegraph that Greece was analysing possibly taking legal action against the European institutions to block its exit from the eurozone, Efe news agency reported.

“The Greek government will make use of all our legal rights,” Varoufakis told the British daily on Tuesday,

Greece, according to the newspaper, has threatened to file a court order not only to block the expulsion from the shared currency, but also to avoid stifling the country’s banking system.

“We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,” the minister argued.

Varoufakis said Greece has sufficient liquidity to carry it until the referendum, but acknowledged that the capital controls introduced by creditor institutions over the weekend are causing problems for companies.

In accordance with these measures, banks will remain closed until July 6 and a daily cap for cash withdrawal stands at 60 euros ($66.70), Efe newsd agency reported.

The failed negotiations in Brussels have made a Greek exit from the euro more possible than ever.

The International Monetary Fund (IMF) reaffirmed on Wednesday that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 per cent that rises to 7.8 per cent in 2019 with medium-term prospects remaining positive.

The IMF’s Asia and Pacific Regional Economic Outlook report said that India was recovering from the effects of demonetisation and the introduction of the Goods and Services Tax and “the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption.”

Medium-term consumer price index inflation “is forecast to remain within but closer to the upper bound of the Reserve Bank of India’s inflation-targeting banda of four per cent with a plus or minus two per cent change, the report said.

However, it added a note of caution: “In India, given increased inflation pressure, monetary policy should maintain a tightening bias.”

IMF declares Indian economy growth fastest among all, IANS

It said the consumer price increase in 2017 was 3.6 per cent and projected it to be five per cent in 2018 and 2019.

“The current account deficit in fiscal year 2017-18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows,” the report said.

After India, Bangladesh is projected to be the fastest-growing economy in South Asia with growth rates of seven per cent for 2018 and 2019; Sri Lanka is projected to grow at four per cent in 2018 and 4.5 in 2019, and Nepal five per cent in 2018 and four per cent in next. (Pakistan, which is grouped with the Middle East, is not covered in the Asia report.)

Overall, the report said that Asia continues to be both the fastest-growing region in the world and the main engine of the world’s economy.

The region contributes more than 60 per cent of global growth and three-quarters of this comes from India and China, which is expected to grow 6.6 per cent in 2018 and 6.4 per cent in 2019, it said.

The report said that US President Donald Trump’s fiscal stimulus is expected to support Asia’s exports and investment.

The Asian region’s growth rate was expected to be 5.6 per cent for 2018 and 2019.

However, in the medium term the report said that “downside risks dominate” for the region and these include a tightening of global financial conditions, a shift toward protectionist policies, and an increase in geopolitical tensions.

Because of these uncertainties the IMF urged the countries in the region to follow conservative policies “aimed at building buffers and increasing resilience” and push ahead with structural reforms.

“While mobile payments are expanding sharply in such economies as Bangladesh, India, and the Philippines, on average Asia is lagging sub-Saharan Africa,” the IMF said, adding that the region should take steps to ensure it is able to reap the full benefits of increasing digitalisation in the global economy. (IANS)